October 8, 2018 / 11:29 AM / 8 months ago

PIMCO's Amey says Britain to avoid disorderly Brexit, long sterling

LONDON, Oct 8 (Reuters) - The pound can strengthen 5 to 10 percent from current levels because Britain and the European Union are likely to reach an agreement to avert a disorderly Brexit, PIMCO’s head of sterling portfolios said on Monday.

Mike Amey said he held a moderately long position on sterling versus the euro, predicting a gradual rise, because the foreign exchange market was “too pessimistic” about the prospect for a disruptive Brexit.

“Our base case is there will be some sort of co-operative solution,” he told Reuters in a telephone interview. “We think both sides can achieve their political ambitions without creating a disruptive economic environment.”

However, Amey warned that risks remained and the pound would fall sharply - to as low as $1.15 - if talks between London and Brussels deteriorated and the UK crashed out without a trade deal.

Pacific Investment Management Co (PIMCO) manages $1.71 trillion in assets globally. (Reporting by Tommy Reggiori Wilke; Editing by Saikat Chatterjee)

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